Pipeline Trading Systems announced today that it has deployed Alpha Pro, a new service that helps trading desks maximise alpha capture by leveraging their ongoing information advantage.
By coupling analysis of historic trading activity, real-time market conditions, and responsive trader control, Alpha Pro provides actionable insight on the factors that are most likely to influence alpha capture, and an interactive trading strategy customised to the specific trading situation as it evolves. Developed in close collaboration with Pipeline clients, the unique system is currently delivering savings in implementation costs of 10 to 40%, with zero reduction in liquidity capture.
Ben Sylvester, Head Trader at J. P. Morgan Investment Management, worked closely with Pipeline on this next-generation trading solution. "Our collaboration with Pipeline to develop custom strategies is delivering exciting results," reports Sylvester. "Our traders now have the opportunity to quickly access optimal strategies that are specific to exactly the situation each order faces on arrival. We're benefiting immediately by our early commitment to next-generation trading technology."
"In the past, pre-trade TCA and trade optimisation have been focused on the average cost for the average trade, ignoring the specific circumstances of each situation," said Dmitry Rakhlin, Head of Quantitative Trading at AllianceBernstein. "Portfolio Managers' investment style, factors triggering a trade, intra-day market conditions, etc. were all left outside of a typical transaction cost model. Traders need to make decisions for each specific trade, not for the average one. We've been working for some time to bring information to the traders based on an analysis of each trade arrival. Pipeline's experience in understanding order flow and its effects on algorithm performance has the potential to add a lot of value to this analysis and complements our own research."
"Traders today face unprecedented challenges executing in markets that are dominated by high frequency trading techniques," said Pipeline CEO Fred Federspiel. "Now our clients can optimise their unique alpha capture opportunities by taking full advantage of their proprietary knowledge of both the initial situation, and the market's ongoing response to their trading." Federspiel continued, "It has been terrific to see traders leveraging these insights on all their trades -- not just the ones where we've worked together on a specific trading strategy -- and using these insights to provide statistically solid market information back to their portfolio managers. The enhanced communication between portfolio managers and traders seems to be paying off across the board."
Alpha Pro is a major new initiative for Pipeline, the latest in a series of innovative technologies that empower traders to maximise alpha capture in rapidly evolving and highly technical markets.